Amazon's second iteration of its popular e-book reader, Kindle, costs US$185.49 to build, $173.51 less than its retail price, according to an iSuppli Teardown report.
When the conversion costs -- manufacturing expenses and the battery -- are stripped away, the price inflation weighs in at more than 50%. So what's making the Kindle 2 so pricey?
E Ink
The Kindle's E Ink display gobbles up 41.5% ($60) of the materials cost, as it's the most advanced technology included in the device and also the centerpiece of the reader. It's ironic, given that the latest E Ink upgrades have provided users with more eye-squinting headaches than previous versions.
Wireless
The original Kindle's wireless broadband card was built into the main circuit board. The Kindle 2's connectivity module, provided by Novatel Wireless, has been divorced from the core and accounts for 27.3% ($39.50) of the total cost.
The Rest
iSuppli doesn't touch a variety of other Kindle 2 components that raise its price. For instance, it doesn't factor in software, intellectual property, licensing fees, shipping, logistics marketing or any of the other components necessary to not only have a physical device, but a physical device that functions.
Voracious readers fear not: Justifications for purchasing the Kindle 2 still exist, despite its hefty tear-down price -- but only if you consume many books per month.
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